Consumer confidence reaches 15 year high

UK consumer confidence reached its highest level in more than 15 years, as the GfK consumer confidence index jumped six points in June. There was also a sharp jump in the number of shoppers agreeing that now was a good time to make major purchases, suggesting that consumer spending will remain robust over the summer. Consumers’ recovering confidence is reflected in positive sales figures released this week by two of the UK’s largest home retailers, Topps Tiles and Carpetright. Topps Tiles’ LFL sales were up 5.9% during its third quarter albeit growth has slowed marginally compared with the same period last year, when LFLs rose 6.3%. Carpetright's underlying profits jumped 183% to £13m in the 52 weeks to May 2, as UK LFLs climbed 7.3%.

In other news, the latest grocery share figures from Kantar Worldpanel show the overall grocery market slipping back into decline with 0.1% less going through the tills compared to last year. However, Morrisons has seen the largest sales increase among the ‘big four’ retailers for the second month in a row, recording sales growth of 0.6%, supported by an increase in online shopping. Sales fell by 1.3% at both Tesco and Sainsbury’s, taking their market shares down to 28.6% and 16.5% respectively. Asda’s sales were down by 3.5%, resulting in a 16.5% share. Aldi and Lidl increased sales by 15.4% and 9.1% respectively, with Aldi reaching a new high with a 5.5% share of the market while Lidl rose to 3.9%.

And finally, in a busy week for online fulfilment, Amazon has introduced a one-hour delivery service for Prime members in parts of central London; it expects to reach all of London and more UK cities by the end of 2015. Meanwhile, M&S is to roll out free in-store collection at more than 100 Simply Food outlets in motorway service stations, railways, hospitals and airports; by contrast, John Lewis is to introduce a standard £2 charge for click and collect orders under £30 from the end of July, saying the current free service is unsustainable. What this demonstrates is the pace of change in the fulfilment space, as retailers battle for market share on the one hand by introducing ever more convenient delivery options, while simultaneously trying to make online shopping pay.

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